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BTCL IPO dates were too ambitious Collins Newman

The delays in the issuing of the Initial Public Offer (IPO) of Botswana Telecommunications Corporation Limited (BTCL) shares to the public are justified, according to the legal advisors of the process.

Rizwan Desai, Senior partner at renowned law firm Collins and Newman, who are the legal advisors of the IPO issue, says the sale of national asset such as BTCL is of grave concern and there are many technical processes to follow.

Rizwan Desai, Senior partner at renown law firm Collins and Newman and Co. told a stakeholders workshop last week, organized by Public Enterprises Evaluation and Privatisation Agency (PEEPA), that the postponements of the issuing of the IPO was due to necessity to handle all due processes.

“One thing that has not been clear enough is that BTCL is not a small start-up; it is an arduous task to sell of a national asset and it has taken the necessary time to ensure that all the preparatory work is done,” said Desai.

Desai pointed out that the Corporation operates in a highly regulated environment and other stakeholders include international suppliers and contract holders, as well as the formal processes that need to be followed, such as the Companies Act requirements.

Though Desai was not at liberty to specify the approvals being sought from various authorities such as the Botswana Stock Exchange and the Ministry of Transport and Communications, he indicated that such approvals are currently being processed, and will the IPO to be issued by the date of 31 December 2014.

The Botswana Telecommunications Corporation Limited shares did not go on sale on November 7th as planned.

The Ministry had intended to launch the IPO on 7th November but this has since been postponed to an unspecified date but not later than 31, December, 2014. Furthermore, as an added measure, the period of offer will also be open for a period of up to 8 weeks.

The launch of the IPO had initially been slated for August 2014 but was moved to November 7. This postponement comes after the initial postponement from the August 2014 to November 7 date, that was initially set for the listing of the BTCL shares.

The decision to further postpone the IPO date to 31 December 2014 came after prospective buyers, at various awareness Pitso held across the country recently, including major centres like Francistown and Gaborone, expressed their need for more time to mobilise funds to buy into the Company.

Desai said that the question of whether or not December is an ideal time to issuing the IPO is constantly being reviewed and that due considerations will be taken.

The Corporation said in a statement, explaining the delay that: “Two key issues, however, have been raised repeatedly in these fora which we believe we need to address. Firstly, the audiences, especially amongst the individual citizens, indicated that they had limited understanding of an IPO as well as how one can participate and benefit from it. Secondly, they requested for ample time to organise funding that they would use to purchase the shares with, in essence, that the current IPO date was too close.”

Desai admitted that with all considerations, the dates that were issued as the IPO were ‘too ambitious.’

The sale of the BTCL shares has been touted as a great investment instrument open to citizens, by BTCL chief executive Paul Taylor.

The Initial Public Offering (IPO) will see Government offering 49 percent of the shares on the BSE of which five percent has been reserved for BTCL employees through an Employee Share Ownership Programme (ESOP). Government will retain the remaining 51 percent. Citizens who buys and hold shares for foreigners stand to lose their investment amount if discovered by the Corporation.

BusinessPost understands that fronting by Botswana nationals for non citizens, is a possibility, even as the shares are reserved firstly for citizen individuals, then for institutional investors, which might include non citizens.

Desai pointed out that the monitoring of citizen investment will occur through gate keeping processes at the constitution of the corporation, at the stage were transfer secretaries handle the transactions, as well as at the stage were dividends are declared. Those who front for non-citizens stand to lose their investments, Desai said.

In the financial year 2012/13, BTCL revenues surged past the billion pula mark to stand at P 1.375 billion compared to P 1.187 billion recorded in the 2011/12 financial period.

Profit before tax increased by 20 percent from P237 million recorded in 2011/12 to P284 million in 2012/13 with net profit margin growing to 21 percent from 20 percent in the previous year.  

The IPO will come with a prospectus that entails the price as well as the story of the IPO journey, as well as an ‘independent review of the numbers’ by financial advisors Deloitte, a global financial services firm.

Desai also clarified the 5 percent of the shares that are reserved for employees are held in a trust, saying BTCL employees are entitled only to dividends declared and do not own these shares. The employees forfeit these dividends when they leave the company’s employ. However, employees are also entitled to buy the BSE listed shares and enjoy ownership of BTCL shares.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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